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VirginiaHousing.com
601 South Belvidere Street
Richmond, VA 23220
MCC Homebuyer Application
and Fact Sheet 8-2020
Mortgage Credit Certificate Program
Homebuyer Application and Fact Sheet
Borrower(s):
____________________________________________ Virginia Housing Loan # (if applicable): ______________________________
Virginia Housing is authorized to issue Mortgage Credit Certificates (MCCs) to eligible first time homebuyers.
An MCC provides affordable homeownership benefits to qualified homeowners through a federal income tax credit. MCCs entitle
eligible borrowers to apply a percentage of their mortgage interest paid each year as a credit against their federal tax liability. The credit
is equal to 10% of the annual mortgage interest paid during the calendar year. The remaining 90% may be taken by the homeowner as
a tax deduction. Note: You must have a federal tax liability to claim the tax credit.
The MCC is effective for the life of the mortgage loan, as long as the home remains your principal residence. The MCC will not be re‐
issued if you refinance your current mortgage loan or if you transfer title to the property. To claim the credit, you must complete IRS
Form 8396 and submit with your federal tax returns each year. You should put “Virginia Housing Development Authority” in the box
called “Name of Issuer of Mortgage Credit Certificate”.
If you obtain and use an MCC and sell your home in the first nine years, you may be subject to a federal recapture tax. Ask your lender
for additional information regarding the potential Recapture Tax.
All homebuyers are advised to consult with a tax professional to see if the MCC will be a benefit. Homebuyers
must determine for themselves whether an MCC will save them money and how valuable an MCC will be for
them over the life of their loan. Virginia Housing cannot and does not give any tax advice to anyone.
To be eligible for an MCC, homebuyers must:
Be a first time homebuyer, or not owned a home as a primary residence within the past 3 years (waived if purchasing a home in
a federal targeted area)
Have income at or below the maximum allowable income limits (note – eligibility income is calculated differently from qualifying
income)
Purchase a home below the maximum sales price
Use the home as their primary residence – not more than 15% may be used in trade or business
Lot size may not exceed 2 acres (waivers considered up to 5 acres)
Applying for an MCC
If you wish to apply for an MCC, your lender will obtain all required documentation to determine preliminary eligibility and your lender
will request Virginia Housing to issue a conditional Mortgage Credit Certificate Commitment. Funding for this program is limited and
funds will not be allocated until the conditional Mortgage Credit Certificate Commitment is issued, therefore it is important to provide
required documentation to your lender as soon as requested. If you close on your loan to purchase your home before the MCC
Commitment is issued you will not get an MCC. Virginia Housing will review all documentation after loan closing and the MCC will then
be sent to you if all MCC requirements are met. Regardless of when you receive your MCC, the issue date for purposes of your taxes
will be the date you close on your loan, and that will be shown on the face of the MCC.
Note: Should the subject property be refinanced in the future; a new Mortgage Credit Certificate will NOT be reissued.
Administration Fee
If you wish to obtain an MCC, an MCC administration fee payable to Virginia Housing in the amount of $750 will be due at the time of
loan closing. This fee will be waived if you obtain an MCC with an eligible Virginia Housing first mortgage loan. Your lender may also
charge an MCC application fee up to a maximum of $250.00.
Please indicate if you wish to apply for an MCC if funding is available.
__________________________________________ __________________________________________
Borrower Signature Co – Borrower Signature
Participating Lender Underwriter Approval: __________________________________________
Underwriter email: ______________________________________________________________________
The borrower(s) above have submitted required documentation and have been approved for their first mortgage loan.
Documentation also indicates that the borrower(s) meet the eligibility requirements for the MCC program.
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